Spare a thought for poor old David (Danny) Blanchflower, arch dove at the Bank of England Monetary Policy Committee. “I feel a weight on my shoulders,” he said when talking to Reuters, yesterday. Poor old Danny Boy, he reckons he has failed to convince the rest of his interest rate-setting chums how serious things are and is rather taking it all personally, as if somehow the economic crisis is all his fault.
And while you are in the mood for being sympathetic, spare a thought for Britain’s retailers. They would rather forget the summer just gone, said the CBI yesterday. The employers’ organization released its latest survey on the state of the High Street on Thursday, and boy, it was really awful.
But then again, maybe it is the Office for National Statistics who should be getting our sympathy. It is receiving no end of flak. Recently the ONS reported another set of healthy figures for the High Street. “This can not be,” said our retailers and those who apply common sense to their economic reckoning. The CBI report just gave these critics of the ONS even more ammunition.
Come to think of it, maybe the ONS doesn’t deserve our sympathy after all. Don’t forget, its data has been used by the optimists to help them avoid the vision of reality.
Mr Blanchflower is worried. “I feel that things I have been fearful about have come to pass and I have actually been pretty accurate in what’s coming and I have failed to convince the others of what is appropriate.
“People need to understand that sometimes you will have to focus on the timing of issues. I think people have become complacent and they have not understood what would happen if an economy starts to slow fast, if firms start to close. What we have now is a turning point in many ways – certainly you might think of it as a paradigm shift. We have a global financial crisis, an oil shock coming [and] people with little experience of what is really going on.”
He added: “People have to start to respond to the fact that we are in a recession and the danger is we’ll be in a very serious and long-lasting recession unless we do something. This is a call to action.” And then came the killer punch. You may recall the Bank of England recently predicted GDP will be flat next year. Well, Mr Blanchflower said this prediction has “a great deal of wishful thinking attached to it.”
In other words, Mr Blanchflower is expressing the same sentiments as the article above on the US economy. Until policy-makers see things for what they are, the solution will not be found.
Meanwhile, the latest CBI report on the High Street came out yesterday. The CBI headline index, which is produced by asking retailers whether sales are up or down on the same period a year ago, and taking the percentage balance, fell to minus 46. That is the lowest reading ever recorded by the CBI and its records go back to 1983 – although it did add that changes to the survey mean the 25-year comparison is not entirely accurate.
Andy Clarke, Chairman of the CBI Distributive Trades Panel, and Retail Director of Asda, said: “This has been a summer that many retailers would rather forget. The downturn in the housing market is continuing to depress sales for those shops selling big-ticket items.
“This month’s report also highlights that as disposable incomes tighten, food retailers fare better than the rest of the market.
“Shoppers will continue to be forced to look around for the best value on offer for all their purchases – not just their groceries.”
© Investment & Business News 2013